Orlando, FL Retail Market Report Q2 2025

In Q2 2025 the Orlando retail sector experienced a mixed performance, reflecting both resilience and emerging challenges. Investment activity remained solid, with sales volume reaching $300 million, underscoring continued buyer interest despite a shifting economic environment. Pricing, however, showed signs of recalibration, as the average cap rate rose to 6.6%, indicating a modest repricing of risk across retail assets.

Orlando Market Overview

On the leasing front, the market recorded rent growth of 4.8% year-over-year, pushing the average asking rent to $30.64 per square foot. This rent trajectory highlights steady demand in high-performing corridors, even as retailers navigate evolving consumer behaviors and cost pressures. At the same time, fundamentals softened, with the vacancy rate ticking up to 4.0%. Net absorption was notably negative at 433,000 square feet, reflecting a pullback in tenant expansion and some store closures.

Orlando’s Asking Rent Per SF Outpaces National Average

Source: CoStar Group, Inc.

Orlando Construction

Development activity remains active, as 1.4 million square feet of retail space is currently under construction, signaling investor confidence in the long-term health of the market. Deliveries in the quarter totaled 284,000 square feet, adding to supply at a time when absorption was negative. This imbalance suggests that while demand drivers remain intact, near-term leasing dynamics may continue to face pressure.

Under Construction Hits 2-Year High in 2025

Source: CoStar Group, Inc.

Orlando Sales Activity

Sales activity in Orlando’s retail market during Q2 2025 reflected continued investor confidence, supported by steady rent growth, strong household expansion, and robust consumer fundamentals such as tourism and buying power. Quarterly sales volume reached $300 million, contributing to a trailing 12-month total of $1.8 billion, which represented more than a 50% increase from the prior period.

Freestanding retail properties and power centers dominated deal flow, while regional malls continued to lag due to obsolescence and high operating costs, drawing investor focus toward open-air centers with more efficient operations and strong tenant mixes. Cap rates across trades in the quarter generally ranged from 4.5% to 6.5%, averaging near 5.7%, while deal activity remained split between numerous smaller trades under $5 million and a limited number of larger neighborhood and community center acquisitions.

50% Increase in Sales Volume from Q2 2024 to Q2 2025

Source: CoStar Group, Inc.

Market Forecast

Overall, Orlando’s retail market in Q2 2025 demonstrated resilience with steady rent growth and strong transaction volume, but also faced challenges from rising vacancies and negative absorption. The market remains positioned for long-term growth, though adjustments will be necessary as new supply competes for tenants and investor expectations evolve.